Posted by: Gabriele Paolacci | November 6, 2009

## Framing

We submitted an adapted version of the “asian disease problem” from Tversky and Kahneman (1981) to 98 workers (65.3% women, mean age = 36.1). Participants were paid \$0.05 for a HIT that comprised other unrelated brief tasks. Participants read the following scenario:

Imagine that your country is preparing for the outbreak of an unusual disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimate of the consequences of the programs are as follows:

Participants were randomly assigned to either condition 1 or condition 2. The two groups received two versions of the programs which were identical, except for the framing of the outcomes. In condition 1, the two reported programs were stated in positive terms (lives saved):

• If Program A is adopted, 200 people will be saved.
• If Program B is adopted, there is 1/3 probability that 600 people will be saved, and 2/3 probability that no people will be saved.

In condition 2, the two reported programs were stated in negative terms (lives lost):

• If Program A is adopted 400 people will die.
• If Program B is adopted there is 1/3 probability that nobody will die, and 2/3 probability that 600 people will die.

Both the groups were asked which program between A and B they would have favored.

Framing the outcomes in positive vs. negative terms produced a reversal of participants’ preferences for the two programs. In condition 1, the majority of respondents (69.4%) favored Program A, exhibiting risk aversion. In condition 2, the majority of respondents (65.3%) favored Program B, exhibiting risk seeking. This patter is similar to the one in Kahneman and Tversky (1981), who found slightly larger majorities (72% and 78% respectively) with 307 participants. Results are consistent with the value function in Prospect Theory (Kahneman and Tversky 1979), which predicts that people tend to avoid risk when presented with a positive frame and seek risks when presented with a negative frame.

References

Kahneman, D., Tversky, A. (1979). Prospect theory: An analysis of decisions under risk. Econometrica, 47, 313-327.

Tversky, A., Kahneman, D. (1981). The Framing of Decisions and the Psychology of Choice. Science 211, 453-458.